How much income tax will I pay in Malaysia?

How Malaysian income tax works

Malaysia uses progressive tax rates. Picture your income as water filling a set of buckets stacked on top of each other. The first bucket is taxed at the lowest rate — in fact the very first slice is taxed at nothing at all. Once a bucket fills, income spills into the next one up, which has a slightly higher rate, and so on. Only the income that lands in a given bucket is taxed at that bucket's rate — never your whole income at once.

One thing happens before the buckets: your reliefs are subtracted from your income first. Everyone gets an automatic individual relief, and most people can claim more. What's left after reliefs is your "chargeable income" — and that is the figure the buckets actually tax.

"If my raise pushes me into a higher bracket, will I take home less?"

This is the fear almost everyone carries: that crossing into a higher tax bracket suddenly taxes all of your income at the higher rate, leaving you worse off than before the raise. It is the most common misunderstanding about tax, and it is simply not true. Only the part of your income that rises into the higher bucket is taxed at the higher rate; everything below the line is untouched.

Here it is with real numbers from our engine — the same person just below a bracket boundary, and again after a pay rise that crosses it:

The raise added just RM110.00 in tax — only the 11% rate applied to the income above the boundary — so take-home pay went UP by RM890.00, not down.

A higher tax bracket only ever taxes the income above the line, never all of it — so crossing into a higher bracket can never leave you worse off. A pay rise always increases your take-home pay.

The 2025 income tax rates

These are the official rates for the 2025 Year of Assessment, applied to your chargeable income (your income after reliefs). Each row is one of those stacked buckets: only the income that falls within a row is taxed at that row's rate.

What people typically pay

Here is the tax on a range of common annual incomes, worked out live by our engine. To keep them comparable, each assumes only the automatic individual relief of RM9,000.00 and no other reliefs — so these are the ceiling, not your likely bill. With the reliefs most people can claim, you would pay less.

There is also a rebate for lower incomes: if your chargeable income is RM35,000.00 or below, a rebate of RM400.00 comes straight off your tax — often reducing it to nothing. It is already included in the figures above, which is why the lower incomes show little or no tax.

Reliefs change this a lot

The examples above claim just the one automatic relief. In reality most people can claim several — EPF and life insurance, lifestyle spending, medical costs, education, childcare and more — and every ringgit of relief comes straight off your chargeable income before the buckets tax it. That is why your real tax is usually well below the figures above.